Cenvat credit on common input services

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This query is : Resolved

Neha Gupta (Querist)

17 July 2013 Our co. is providing both taxable and exempted services from various sites. We are having common input services for which payment is made through our head office situated in Mumbai.
Service tax paid on such common input services includes services like professional fees, Bank processing charges which are paid through HO bank a/c and its quite impossible to bifurcate these services in terms of their utilization i.e. whether they are used for taxable or exempted sites.
Is there any way to claim cenvat of the service tax paid on such common input services except application of rule 6 of cenvat credit rules, 2004 ?

Arun Kumar Singh

Arun Kumar Singh (Expert)

17 July 2013 Cenvat credit of inputs and input services is not available if final product/output service is exempt from duty/service tax. in such cases, the manufacturer/service provider has following four option w.e.f. 1.4.2011.
1. Maintain separate inventory and account of receipt and use of inputs and input services used for exempted goods/exempted output services under rule 6(2) of cenvat credit rules.
2. Pay amount equal 6% of value of exempted goods and of value of exempted services under rule 6(3)(i) of cenvat credit rules.
3. Pay an amount equal to propostionate cenvat credit attributable to exempted final product/exempted output services, as provided in rule 6(3A)- rule 6(3)(ii) of cenvat credit rules.
4. Maintain separate account for inputs and pay amount as determined under rule 6(3A) in respect of input services- rule 6(3)(iii) of cenvat credit rules as inserted w.e.f. 1.4.2011.

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